SCRA: 6% Interest Rate Cap
One of the benefits afforded to servicemembers under the Servicemembers Civil Relief Act (SCRA) is a 6% interest rate cap on all debts incurred prior to the servicemember being placed on active duty. This reduction must remain in effect at least for the duration of their active-duty status and, in some cases, for one year after that service. During this time, a financial institution must forgive any interest in excess of the 6% and re-amortize the remaining payments. Any interest payments made in excess of the 6% during the time period of service must also be refunded. Keep in mind, the SCRA defines “interest” to include any service charges, renewal fees, annual fees, etc., so these will need to be taken into consideration as well.
Kevin explains more in the video.
Published
2025/03/28
Kevin Edwards
Kevin brings years of experience and a unique perspective on regulatory matters to our clients. A self-proclaimed geek and accredited CRCM, Kevin is also a recovering attorney with experience as in-house counsel for a large regional bank and one of the leading national title insurance providers. For reasons unknown, Kevin decided to leave the safety and serenity of his desk job to seek fortune and glory as a wandering adventurer. Like a bank compliance version of Kwai Chang Caine, The Man with No Name or Don Quixote, he now travels the land seeking to help those in need and righting compliance wrongs, wherever he may find them. Kevin lives in Sioux Falls with his two children, who are surprisingly normal after having endured their father’s vivid imagination for their entire lives. He won’t admit to having any hobbies, because apparently “Regulations never sleep.” (While he does say this in his Batman voice, we’re pretty sure he’s joking.) From the looks of his Facebook page, he likes the outdoors and spending time with his large extended family (who seem like relatively normal people).